EGoM to take appropriate decision on RIL-NTPC case: govt counsel

The Additional Solicitor General of India, Mohan Parasaran said that any government decision will over-ride private contracts. Parasaran who represented the government in the RIL-RNRL case, in an interview to a TV channel, said that both the parties need to re-negotiate their terms, as per the gas utilisation policy framed by an empowered group of ministers (EGoM) in August 2008.

The Supreme Court has today given a judgment on the RIL RNRL dispute on the supply of natural gas from Krishna Godavari basin. It said that government has the right to decide the price, and that RIL has no marketing rights over the gas, which the company had discovered in  the deep water gas field.

"The court has not taken into account, the quantum or tenure of the gas. They have to re-negotiate depending on the policies of the government," said Parsaran. The gas utilisation policy has fixed the price of gas at $4.2 per mmbtu. It had also come up with a list of companies and sectors which would receive gas on a priority basis. Priority was given to those power plants which have been constructed.

The Ambani brothers were fighting on this case on three counts--the quantity, tenure and price of gas. RNRL claims that as per the gas sale master agreement and the Memorandum of Understanding which became the basis of the the division of the Ambani empire, 28 mmscmd of gas was to be supplied to Reliance Power's Dadri power project for 17 years at a price of $2.34 per mmbtu.

When asked about the effect of this judgment on the RIL-NTPC case where both the parties are also fighting on a similar gas sale pact from the KG basin, he said that eGoM will take an appropriate decision on the case. "NTPC is a public sector undertaking. It is an arm of the govenrment," he said.

Meanwhile, Oil Minister Murli Deora, said: "That the gas belongs to the government and the people of India and the government will have the right to decide on the pricing. The EGoM will take decision on gas prices in future as well."